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Worthington faces housing crunch

A recently-completed study showed the need for places to live in town is more than it was during a study done four years ago.

"We've had four housing studies in the last decade, and every one of them has determined that we need additional housing," Mayor Alan Oberloh said. "It's not just affordable housing, its market-rate housing, too. That's one of the reasons we're getting behind this to try to make sure we move forward with additional housing."

The last study, done in 2009, showed the city needed 186 to 210 rental units.

The current study, which was presented to the council Monday, said that need is now 250 to 260 units.

"They didn't surprise me," Director of Community and Economic Development Brad Chapulis said. "But it does bring out several good points about our population growth and not running in line with the number of housing units being built and showing an increase in the number of persons per household. Which leads to a conclusion that either there are individuals making choices to live together above and beyond traditional families or that they are being forced to."

The study was done by Jay Thompson of Viewpoint Consulting Group, Inc. and given to the city on March 29.

"Due to changes in the economy and the continued growth of the community, we wanted to get a current snapshot of housing needs in our community," Chapulis said. "It's pretty standard to have these done on a four or five year schedule."

One of the questions in the study related to the average number of people per household. Worthington's average was 2.86 people per household. The state average is 2.54.

"I think we're at a breaking point," Thompson said. "How many more people can you squeeze into housing stock?"

To get the city to the same number as the state average, 567 units would have to be added.

The study explained Worthington's population grew by 13 percent during the 2000s, making it one of the fastest growing communities in southwest Minnesota.

To accommodate the needs, 175 to 200 houses need to be added by 2020. A total of 300 to 325 units for rental and senior housing are needed.

"This document isn't necessarily just for the city, it's for the community as a whole," Chapulis said. "It is available on the city's website and we've been handing them out to developers since Tuesday. We're trying to get the word out there is a need and trying to show there is a need and a market to construct housing within the city of Worthington. As a city, we're going to take that and identify goals and objectives that we want to achieve over the next few years, using that study as the basis and identify what our role is to help assist with getting housing completed here in Worthington."

Thompson said there is a lack of lots to support that number of new homes.

"You'll have to bring some new subdivisions online in the next year or two years, or the lots will be gone and there won't be much choice," he said.

Also addressed was the student housing component. According the study, 35 to 40 units on campus or within walking distance of Minnesota West Community and Technical College are needed.

There is a 36-unit project in the works with the city of Worthington, with multiple organizations involved.

"The rental demand is so much higher than 24 or 30 units every few years," Thompson said. "That is a drop in the bucket and doesn't even make a dent. The rental demand is quite high."

However, the issue may be the financing.

"Ever since the recession came, people in the financial realm, they are not as open with the financing at the greater rate like they used to," Oberloh said. "Now they need more investment from the private sector. So far, the private sector has not been interested in doing that. Until we can get to that point, there is always a gap. That's been the roadblock. I hope we someday get back to what it was so there could be more financing options available. Until then, the city has to be involved. Unfortunately, that's not our field of expertise, getting into housing."

Because of the need, the study indicated the vacancy rate is zero, something Thompson said he hasn't seen.

"Basically, if someone is coming to town, there are no rental units available for them," he said. "The main thing, it was still 100 percent occupancy in the last study. In the previous one, it was still high. Affordable apartments are the same way, 100 percent.

"If you look at new construction, Okabena Estates, the occupancy was 100 percent. It gets leased up right away, has a waiting list."

The council, hearing the report on Monday, was able to ask questions and make comments about the study.

"We can't seem to get new housing going," council member Mike Kuhle said. "It must be the wages."

The median income of Worthington in 2012 was $37,624, according to the study. The state's median income, however, was $54,550.

"The thing that probably surprises me as much as anything is our median income," Oberloh said. "If we could get our median income up and try to spur some more housing and market-rate housing and some spec housing opportunities by our local contractors, that would be the best thing we could hope for."

After hearing the information, Oberloh concisely summed up the situation.

"Let's get building houses," he said.

Daily Globe Community Content Coordinator Aaron Hagen may be reached at 376-7323.